*** The Neglected Contribution of Grammateus to Bookkeeping History ***

( English Version*)


Abstract: This article brings to light the neglected contribution of Grammateus, the author of "Ayn New Kunstlich Buech (A New Skill Book)" which, although basically a mathematics text, contained a section on bookkeeping in the style of Paciolo's "Summa". His work is analyzed to prove the technical competence and the historical nature of the bookkeeping system which he propounded.

Paciolo and his "Summa"

Some eight hundred years ago the seed of modern bookkeeping was sown in Florence, Italy. Fragments dated 1211 of the account book of a Florentine banker present the earliest known evidence of the double entry-system1). From this time the art of bookkeeping began to bud and continued to grow in the fertile soil of commercial practice in Italy. About three hundred years later the double entry concept came to full fruition in Venice.

Paciolo and his "Summa"
In 1494 an Italian monk published a book on mathematics which included 36 chapters explaining double entry bookkeeping. In his book, "Summa", Luca Paciolo wrote "we describe the method employed in Venice"2).

Paciolo thus made no claim to the invention of the double entry system, but its inclusion in his book has resulted in his being generally recognized as the the author of the first published double entry bookkeeping text.

Benedetto Cotrugli is believed to have written the first double entry bookkeeping book in 1458. It and other hand written manuscripts seem to have circulated in the Italian city states during the 15th century. Cotrugli's book was not published until 1573 so Paciolo may claim the first published text. Hatfield wrote "it is seldom the case that a first book on a subject has so dominated its literature as was the case with Paciolo's De Computis et Scripturis"3).


Grammateus and his "Ayn New Kunstlich Buech"

In 1518, some twenty-four years after Paciolo had published his book a German mathematician named Henricus Grammateus (Heinrich Schreiber in German) 4) completed a book on mathematics at Vienna and published it at Nuremberg in 1521.

Ayn New Kunstlich Buech
This book, "Any New Kunstlich Buech (A New Skill Book)" devoted a section to the subject of bookkeeping. The first edition was neither paged nor divided into chapter. If it had been paged, it would consist of 248 pages of which pages 187 to 216 are concerned with bookkeeping. This book is recognized as the oldest German Text on bookkeeping and, following Paciolo, the second oldest printed text in the world.

Several historians have compared Paciolo's and Grammateus' texts to the detriment of Grammateus.

For example, J.R.Fogo wrote about Grammateus' book "...the part dealing with bookkeeping is very brief, and so confused and bad that it proves the arithmetic-master's knowledge to have been very perfunctory....it is extremely improbable that he himself knew much about what he was professing to teach" 5). B. Penndorf, a German bookkeeping historian, described "...his bookkeeping as neither single or double; he has known Paciolo's work, but not understood. So we will perhaps have to reduce the praise that Grammateus has hitherto received to the proper extent, as J.Row Fogo has already done"6).

These comments by Fogo and Penndorf are followed by other historians. The view that Grammateus did not understand double entry bookkeeping is still widely held.


Grammateus' Bookkeeping System

The "Era of the Fuggers"7) is symbolic of the economic prosperity of Germany during the Middle Ages.@ Bookkeeping is a method of accounting for capital and is closely related to economic conditions8).

Judging from the economic sophistication that Southern Germany had attained during this period, it seems doubtful that bookkeeping methods could have been as "underdeveloped" as the above comments imply. On the contrary, the high level of economic activity should have fostered a higher development of bookkeeping methods there than in other countries.

Using this hypothesis, the author cannot accept completely the criticism that Grammateus did not understand double entry bookkeeping. A review of his system in three respets: the system of records used, the entry rules and closing procedure, leads to the conclusion that Grammateus' method was based upon a double entry concept.

FLOW-CHART of Bookkeeping by Grammateus
With respect to the "underdeveloped" charge, he was an exponent of "periodic accounting" as opposed to the so called "lot accounting", and there was a numerical connection between the journal and ledger. These are evidences of a well developed system.

The system propounded by Grammateus in his 1521 edition discloses the periodic accounting. The process is indicatd by the use of remaining goods record and a proof of bookkeeping. This and relating the journal to the ledgers with a numerical connection are approaches which were not well defined in Paciolo's work.

Simon Stevin has been given credit for introducing the annual settlement (periodic accounting) and the numerical connection in his text of 1605 - 1608. It is clear that Grammateus preceed Stevin in both of these concepts.

In addition, he explained the compound transaction as can be seen in the transaction journalization of the 7th of February on page 192. The introduction of the compound transaction has generally been attributed to James Peele (1569).


A Need to Account for Invested Capital

Grammateus' contribution in emphasizing the periodic accounting method is particularly notable.

It is apparent that the lot acounting method (venture accounting) and the periodic accounting method had co-existed in the general practices of double entry bookkeeping at the beginning of the 16th century. The term "co-existed" is used since, passively, an author may not be able to discern, in a simple manner, the shift from the "lot method" to the "periodic method" as bookkeeping developed. Actively, an author may be able to recognize a homogeneous conception within both methods, and this would lead him to seek for something other than mere difference in method.

"Guided by a conception of the kinds of events that will be relevant, the historian may attempt to trace the origin and development of a particular idea or practice" 9). In this case the underlying conception rests on the objective of bookkeeping.

Simply, it was caused by a need to account for invested capital. This capital is employed to seek profits and bookkeeping must follow the activity. By itself, the amount of profit is meaningless and must be measured in relation to a time cycle of capital movement. That is, profit (or loss) must be measured as a factor of the efficiency of the use of capital as well as an absolute increase (or decrease) of capital.

To view the change from the lot method to the periodic method as simply a major event in bookkeeping history emphasizes a change in format (or technique) rather than the more fundamental function of bookkeeping to conform to social or economic change.


Importance of Periodic Accounting

When we recognize a homogeneous conception within both methods, we may be able to discern the difference between bookkeeping and accounting, not as a difference between form and procedure, but as a difference between the functions of bookkeeping and accounting as a capital calculation at different social stages.

To illustrate that periodic accounting considering the absolute amount and the time cycle for invested capital must have been of interest to merchants, the following algebraic problem was posed by Grammateus:


Three men form a company. The first man invests 60 florin and stays 12 months. The second man invests more money and stays 4 months. The third also invests some money and stays 5 months. They have gained a total of 1,250 florin. The first man is given 180 florin, the second man, 780 florin, and the third man 290 florin. This is the question: how much had the second man and third man invested ? (on p.144 of the 1521 edition).

Grammateus maintained that bookkeeping is, by its very nature, always periodic. It was only a short interval between the publication of Paciolo's work and the publication of his own text. However, during that interval he recognized a new importance of the periodic method and by his illustrations and explanations gave us a new light to see the history of bookkeeping and accounting.

Grammateus has often been esteemed as the first German author to write on bookkeeping and the author of the text published second only to Paciolo's in the world. However, it has not been until recent times that he has been credited with being the first author to recognize and explain the increased importance of the use of periodic accounting; a concept that still governs much of accounting theory and practice today.

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